Eligibility and expansion of the Medicaid program are made by states with a state-specific federal financing contribution from Centers for Medicare and Medicaid Services (CMS). Generally, the federal contribution is a greater share the poorer the state. Assume that in the utility model framework, the consumer/decisionmaker is the governor of a state. Please see the figure below. I represents the governor's budget constraint, and U₁ is his indifference curve, with the optimum investment bundle as labeled below (m₁,x₁).